Congress Warned of Credit 'Downgrade' if War Savings Counted as Deficit Reduction

Fox News ^ | 7/25/2011 | By Judson Berger

[tobyhill]

Senate Democrats' inclusion in their proposed debt package of $1 trillion in savings from the wars in Iraq and Afghanistan may not satisfy ratings agencies threatening a credit downgrade since the wars were expected to end with or without a debt deal.

The budget gimmick is one that has been used by both parties. President Obama and House Speaker John Boehner had earlier considered employing it during discussions that have since broken down. Now Senate Democratic Leader Harry Reid is using the trick in his $2.7 trillion deficit-reduction plan, according to aides. Boehner has not indicated where he would draw his savings, totaling up to $3 trillion.

To put the numbers in perspective, the Congressional Budget Office estimated earlier this year that U.S. budget deficits would total $7 trillion over the coming decade.

But to reach $1 trillion in war costs, budget scorekeepers simply look at current funding for the wars and spread that out over 10 years, rather than projecting what is going to happen in the future.

"The way the CBO constructs the baseline is it extrapolates current law, and the current law is that we are funding the wars in Iraq and Afghanistan," former CBO Director Douglas Holtz-Eakin told FoxNews.com. "The trouble is that CBO's baseline is not what anyone really thinks will happen."

Holtz-Eakin said that while Reid's proposal is transparent about including war savings, the problem with employing it here is that ratings agencies want to see "real savings" out of the current talks.

[tobyhill]

Rats using the old Smoke and Mirrors.

[HereInTheHeartland]

We elected a bunch on conservative people to the House in 2010.
We sent them there to do something. We didn't send them there to go along to get along.

This nation needs a smaller government. Being “Greece lite” is not an option.

Fix it, cut it, and shrink it.

[Qbert]

Plus we’re going to get downgraded anyway if the ultimate plan doesn’t save $4 Trillion, right?

[cranked]

Double counting, gimmick Libtard/Progressive math....and even using that BS, they fail! =.=

[newzjunkey]

Must be those “gimmicks” Boehner said Reid’s plan was using.

[Iron Munro]

Democrats - you can always trust them....

Yes you can always trust them to be sneaky, lying, theiving, absolute, 100% scumbags.

The first words out of their baby mouths were probably the first lie they told to mommy.

They probably lied at confession.

Stole from the church collection plate.

Threw slugs and washers into the Salvation Army kettles.

Crossed their fingers when they swore their Oath of Office.

Lie to their own kids.

[newzjunkey]

http://www.speaker.gov/Contact/

Office of the Speaker
H-232 The Capitol
Washington, DC 20515
Phone: (202) 225-0600
Fax: (202) 225-5117

U.S. Capitol Switchboard, (202) 224-3121

[upchuck]

Regarding Dingy, S&P and Moodys:

Hey Dingy, don’t try to bullsh1t a bullsh1tter!

These guys know how to blow away the smoke and break the mirrors.

If the US is gonna try and BS about the spending cuts “spread out over 10 years,” we DESERVE to have our rating downgraded.

[BobP]

Fix it, cut it, and shrink it.

--------------------------

I agree HereInTheHeartland.

Yes on spending cuts.
No new taxes.
No increase in the debt ceiling.

Boehner on plan to increase debt limit: 'Less Than Perfect' but 'Good Step in the Right Direction' -- 07-25-2011

House Majority Leader Eric Cantor said the Boehner plan is 'a well-thought-out and reasoned plan where no side gets what it wants.' -- 07-25-2011

John Boehner

Again, cuts over the next 10 years!!!! And another special congressional super-committee to recommend further deficit reduction steps!!! Sounds like it smells of BS to me. Whatever passes will mean nothing except more borrowing.

With accounting tricks, this plan isn't even worth $2.7 trillion dollars.

These guys aren't paying down, the national debt. They're trying to find ways to agree on maintaining the status quo. Most importantly, it removes the cloud of a possible default from our economy through the 2012 election.

The jackwagon president had to cancel two fundraisers scheduled for tonight (Monday, July 25, 2011).

[mouser]

I will believe those conflicts are over when ALL our troops are home and no new ones started.

Too many people make too much off a war to stop one.

[CharlesWayneCT]

The republicans “counted” it, because it has to count — CBO is the counting agency, and they count spending for the wars every year. The total deficit they project includes it.

But the Republican plan cut a lot more than 2.7 trillion. If you cut 4 trillion, and 1 trillion is something you expected anyway, you still have more than the total fake cuts the democrats are proposing.

The democrats simply took their 4 trillion fake plan with a trillion in tax increases, and dropped the tax increase, leaving them with 2.7 trillion. It’s not a compromise, it’s a fakery.

It is clear now that what the democrats fear more than ANYTHING is having to vote on a debt limit next year.

The tea party, the conservatives, and the republicans should all agree on this — Obama asked for way too much new debt. We should support a clean, small debt increase with 1 trillion in real cuts.

Then either October’s budget spends within the new debt limit, or the democrats in the senate can explain why they have to increase our debt even more.

The debt ceiling is the ONLY thing preventing government from spending more money. We shouldn’t be raising it past the next election. Markets wont’ be spooked by a shorter term debt increase, they will be spooked if they don’t see us cutting spending.

BTW, we should be attacking Obama daily for saying the 2.5 trillion increase “takes us through 2013”. EVERY republican should get on TV and say — Obama is asking for an unprecedented 2.5 TRILLION in new debt, and he still says it won’t be enough for him.

[Brad from Tennessee]

The wisest decision Al Qaeda made on 9-11-01 was not crashing a jetliner into the Capitol.